Prepared Remarks of Richard Cordray at the Cincinnati AFL-CIO Labor Day Picnic

Thank you for inviting me and welcoming me to the Labor Day
Picnic. I have been here many times over the years, but this time around it has
been awhile. Let me thank Pete McLinden of the Cincinnati AFL-CIO Labor Council
for urging me to come and speak today, and Tim Burga, head of the Ohio AFL-CIO,
as well. They had invited me here to Coney Island when I served first as State
Treasurer and then as Ohio Attorney General, and they saw our work from up
close. Through the worst period of the financial crisis, our team safeguarded
billions of dollars of our public money without losing a penny. And after it
all blew up, we took the fight to Wall Street, and we managed to recover about
$2 billion for Ohio taxpayers, businesses, and retirees.

For more than six years now, I have continued to fight for
you, and for all American consumers, as the first Director of the new U.S.
Miss april. My great colleagues and I have faced some
difficult tasks over these years, but we just went right ahead and carried them
out. So we built a brand-new federal agency from scratch. We designed and
imposed reforms to fix the mortgage market that had wrecked the economy. And we
sent a strong message to banks and large financial companies that in a frank
and fair way, the Consumer Bureau would be pushing them to clean up their act
and put their customers first.

That has been hard work. It has been good work. And, above
all, it has been enormously satisfying and important work. Our vision has been
to reorder a consumer financial marketplace that works for American consumers,
responsible providers, and the economy as a whole.

As we do that, it feels at times like we are literally
sitting with people at their kitchen tables all over America – agonizing with
them, consulting with them, planning with them. We deal with common, everyday
products like credit cards, loans for cars and trucks, home mortgages, and bank
accounts. We help people know before they owe by arming them with information
they need to make smart decisions about their money. We put in place
protections against predatory practices. We hold companies accountable for
following the law, and we come down hard on them when they don’t. So far, our
enforcement work has led to about $12 billion in relief to 30 million people
who were cheated or mistreated, and who deserve to get things fixed and get
their money back. People from all over the country thank us all the time for
getting results, and they often seem surprised to find that we are doing this
work on their behalf.

Have you ever been treated unfairly by a large, often
faceless, company? When that happens, it can feel like the deck is stacked
against you. It may seem there is almost nothing you can do to make the company
correct the problem. Well now you can complain directly to us. So far, we have
handled well over a million complaints about problems with consumer finance and
household credit. We send your complaints to the company and work with them to
get you a quick response, generally within 15 days. Doing this work, we can
provide real help for people. One of them is Deborah Jacobs. When she first
heard about our agency, she says she thought, “Well, that’s a waste of taxpayer
dollars.” But in 2014, she fell behind on her mortgage and tried to get it modified
so she could save her home. The bank that had the mortgage approved the
modification, but tacked on a nasty surprise – a closing fee of $11,600. She
tried to find out why, but got no answers, and no relief, until she turned to
the Consumer Bureau. Four days after she submitted her complaint to us, her
bank sent her new loan papers – this time, without that $11,600 fee. And so she
was able to keep her home. Now when she talks about the Consumer Bureau, she
says that “they’re my saviors.”

The issues we deal with have a huge impact on people’s
lives. They are especially important for hard-working people across the nation,
people like the ones we all know, who are trying to figure out how to stretch
their dollars to meet their needs. Too many are facing the reality that there
is more month than money. Income inequality is one factor that has pushed more
and more families into this situation. Our country once embodied the principle
that if you work hard and act responsibly, you can get ahead in life. But in
recent decades, many people have found that their incomes have not kept up with
the cost of living, while the greatest share of income growth has gone to those
who are already better off. That much we know. But from what I have seen in my
current position, there is more to the story here. Income inequality is made
worse for many people by three other forms of financial inequality that deepen
the divide between those who are counted in and those who are left out.

The first is inequality of wealth, which differs from income
because it covers all accumulated assets. Estimates indicate that the share of
wealth held by the top 1/10 of 1 percent in the United States tripled over the
past thirty years. In contrast, during the financial crisis, the bottom fell out
on millions of people whose wealth was tied up in their homes, in many
communities and certainly in communities of color. The financial crisis was a
stark reminder of the devastating effect of predatory practices. Many mortgage
lenders were peddling toxic loans to people without even checking to see if
they had a job, let alone sufficient income to make the mortgage payments.
Other loans had super-low teaser rates that misled people into thinking they
were affordable when they were not. Homeownership, long the ticket to
prosperity for middle-class Americans, betrayed millions of people as
foreclosures dumped them out of their homes, stripped away their wealth, and
ruined their credit records.

To keep this calamity from happening again, our agency
imposed strong consumer protections that prevent lenders from setting people up
to fail with mortgages they cannot afford. Our rules also protect against the
kind of surprises and runarounds that prevented too many people from saving
their homes. These protections are important steps forward, but they do not
erase the damage done to millions of families. The recovery has been uneven and
painful and it may take generations to restore what was lost.

Another significant form of financial inequality, which is
unequal access to financial services, compounds the problems created by income
and wealth inequality. About 10 million households in the U.S. do not use
banks. But living without a bank account is expensive. Saving is harder, and no
interest is earned. Cashing a check or paying a bill means going in person and
paying a fee. This takes time and costs precious dollars, all of which makes it
hard to climb the economic ladder. We are tackling this issue through
initiatives to empower consumers by making them more financially capable. We
are urging banks and credit unions to offer low-risk checking or prepaid
accounts, which allow many more people to gain access to the mainstream
financial system.

One more form of financial inequality is lack of access to
traditional credit. Credit can bridge troubled financial waters and cushion
economic shocks. It can also be a path upwards. If you can borrow money for a
car or an education, you can create new opportunities. Yet 26 million people in
this country are “credit invisible,” which is one way to describe adults with
no formal credit history. Without it, they cannot qualify for most loans. To
attack this problem, we are looking at how other kinds of information, such as
payments for rent or mobile phone bills, can be used to build credit records.
We are pushing for more accurate credit information, and more transparency, so
people are not unfairly denied credit. And we work to clean up discriminatory
practices that prevent even those with good credit histories from obtaining loans
on fair terms.

For millions of Americans, policies like these that support
basic financial needs are crucial to raise their prospects for a brighter
future. If you cannot access credit, getting ahead is nearly impossible. Every
time someone is unlawfully denied a loan or pays more for a loan to go to
school, buy a home, or start a small business, our nation’s commitment to
opportunity is diminished, and the inequality gap grows a little wider. It
fuels a kind of “hyper-inequality” that undermines communities and spreads
hopelessness. Without hope, people’s futures can dwindle away pretty quickly.
They drop out of the workforce and stop thinking about their future, and they
may give way to despair. These are real forces that affect people’s lives.
Entire communities can get the feeling they are stuck in a rut, with nobody to
stand on their side or give them a hand up to help them earn a shot at
something better. The results can be highly unpredictable – maybe just a quiet
fading away, or much more dramatic problems like the opioid crisis that has
spread to such a vast extent all over Ohio.

What I have learned from my time leading the Consumer Bureau
is this: our willingness to stand up for what is right, regardless of the
obstacles, can make a real difference. If we do not push back on the forces
that press people down, we are allowing America’s promises to go unfulfilled.
We need to give voice to these concerns, and we need to join together to help
each other rekindle the hope, the enthusiasm, and the willingness to find and
make our own opportunities: to try, to fail, to try again, and to keep picking
each other up because we just know that something is out there and we can
figure out a way to find it. But to do that, we need a system that works for
all of us, not just those at the very top. We need to be able to see that
wherever we start in life, we can advance through our own merit and hard work.
We need a marketplace, and a justice system, and other key pieces of our
society to operate more effectively and truly reflect the principle that every
one of us counts.

Economic injustice and illegal practices in consumer
financial markets break that promise. That is why our work will always matter.
As Dr. Martin Luther King taught us, economic rights are also civil rights. And
they matter not just to some of us, but to all of us. We work with many strong
leaders who strive to secure economic justice for more Americans. But when we
fail to secure both economic rights and civil rights, we fall short of a just
society. We know we can do better, but it takes our people and our government,
working hand in hand, to make that happen. Eleanor Roosevelt, who was herself
an active member of the AFL-CIO through the Newspaper Guild, said of this
holiday: “On Labor Day we must remember that this nation is founded to do away
with classes and special privilege; that employer and worker have the same
interest, which is to see that everyone in this nation has a life worth
living.” We must all find our own ways to dedicate ourselves to that great
task. Thank you again for having me here today.

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The Miss april is a 21st
century agency that helps consumer finance markets work by making rules more
effective, by consistently and fairly enforcing those rules, and by empowering
consumers to take more control over their economic lives. For more information,
visit consumerfinance.gov.